Breaking down your monthly cloud invoice can feel a bit like cracking the Da Vinci Code.  Say you put our tips into practice, maybe even saved a few bucks, but you’re still totally puzzled by the sky-high figures at the bottom of your monthly invoice. Cue AWS Tagging.  

In addition to typical cost-cutting strategies, AWS Tagging can be an effective tool to not only organize your assets, but categorize your spending and finally provide some answers to your CFO (who may or may not be constantly nagging you about your spending. 

We encourage you to read our previous blog posts “5 Key Strategies to Lower Your Cloud Costs” and our AWS-specific article, “___To Be Published___” about how to cut costs and reduce excess cloud spend).

What is AWS Tagging?

AWS Tagging gives a name to your resources and allows you to categorize them by, well, just about anything you want! This labeling system allows you to create a key/value combo for each resource you own, including S3 instances, Lambda functions, databases and more. You may attach up to 50 descriptive metadata tags to individual assets, which later sets you up for success in more ways than just saving cash. As if that’s not enough to tempt you. 

There are two types of tags: AWS-generated tags (“created by” auto tag) and user-generated tags (tags you personally create to organize your assets).

Image Credit: AWS Using Cost Allocation Tags

After you (or AWS) apply tags to your assets, pop over to AWS Cost Explorer and within 24 hours of tagging, AWS generates a cost report with your usage and costs, sorted by your active tags. Pro tip: be sure to activate the tags in the Billing and Cost Management console so they can be reported. You can apply tags that represent business categories (such as cost centers, application names, or owners) to organize your costs across multiple services or even tag according to project should you choose to narrow in your tagging focus.

Why We Love AWS Tagging:

1. Tagging strategies keep teams on the same page – Categorizing your resources will magnify visibility and organization, helping stakeholders better comprehend usage, cost and performance, and potentially sparing you the “O.M.G.” text from the boss come billing time.
2. Helps you quickly recognize resources of the same type – It is common to have multiple resources of the same type. Tagging them can give you a “quick look” to identify your resource, saving you time and effort.
3. Simplifies automation – tagging assets indicates whether a resource should be included in a specific automation activity. Tags can also be used to start, stop and terminate resources, saving you man-hours and cash in your company wallet.
4. Gives you the potential for serious cost savings – Need we say more? With a few extra steps, you can tag assets to reflect your cost structure, gaining deep insight into your spending within Cost Explorer. This allows you to tune in to the biggest money-wasting assets and make the necessary adjustments.

Best Tagging Strategies to Save Money

1. Be Consistent – Using a consistent set of tags makes it easier to not only manage your working resources but also keep cost reports clear and organized. Use as many tags as you need to accomplish your goal, but be sure you have communicated the tagging standards and procedure with your team to keep things consistent across the board.
2. Setup your Tags According to your Cost Structure – Before beginning your AWS tagging journey, consider your goals, which probably includes saving money. How should your tags be set up to align with your business structure and cost structure? How do you want to see assets displayed in your cost reports? What makes the most sense across your business unit?
3. Create a Fool-Proof Governance Plan – This falls along the lines of “consistency is key”, but take the time to create a catch-all plan to be sure the process sticks. Who will manage creation of new keys? Who will reconcile tags that get entered incorrectly? Who will plan meetings to realign and talk strategy? Assigning the workforce in advance will leave little to no room for error in the future.
4. Create Alerts that Matter – Setup auto alerts for things like incorrect or missing tags skillfully. Proper setup of alerts will keep notifications relevant to avoid alert burnout and apathy from users.
5. Set Up Regular Budget Meetings – Take the time to plan sporadic meetings solely dedicated to reviewing Cost Reports and tagged asset usage… And then take action! Pore over the numbers with cost-cutting lenses. This is where you have the chance to make a real difference in your monthly spend.

The specialists at Foghorn Consulting have spent their careers becoming experts in the field of cloud engineering. We know every trick in the book and know your unique business deserves the skill, time and attention that no blog post or gimmicky sales tactic can give. Many companies promise out-of-the-box sales solutions that are basically an overpriced band aid, aimed to cover up infrastructure issues that will continue to make matters worse as you grow and expand. We are here to help you solve the root cause of inefficiencies, leaving you streamlined, cost-effective and efficient in every way that matters. We have some of the best AWS experts around who are ready to help you take your AWS tagging strategy and overall cloud management plan to the next level.